Franchises Keep Adding New Jobs

By Jonathan Maze

Published: 2014.06.18 04:31 PM

The economy might be growing at a snail's pace, but franchise growth is moving like a rabbit.

Franchises added 22,020 jobs last month, according to the latest ADP National Franchise Report. That's a monthly growth rate of 0.3 percent that outpaces the 0.2 percent growth rate for private businesses and small employers.

The rate of growth is less than the 30,950 jobs the sector added in April. But it remains at a brisk pace, and is above the 12-month average job growth for the sector, according to Ahu Yildirmaz, vice president and head of the ADP Research Institute.

The private sector as a whole added 179,490 jobs in May, according to ADP.

The ADP National Franchise Report uses payroll data from ADP, a human resources firm that also tracks private employment data. ADP produces the report along with Moody's Analytics.

Franchises have been growing at a decent pace over the last year, led by certain industries that appear to be flourishing. Last month, auto parts dealers added 1,238 jobs, a 0.4 percent growth rate. Restaurants, which dominate franchising, added 8,231 jobs during the period. Only education franchises, which lost a scant 50 jobs, and professional services, which saw employment decline by 930 jobs (-0.8%) had declines in May.

Franchises have continued to develop new units, buoyed by an improved lending environment, aggressive franchises finding ways to get more units built at lower costs. And some sectors of the economy continue to grow and expand. Restaurants, for instance, are growing thanks to booming businesses like frozen yogurt and fast-casual pizza.